Republican Oklahoma Rep. Stephanie Bice introduced a bill Thursday that would prevent the Securities and Exchange Commission (SEC) from implementing a rule that would force businesses to publicly disclose a wide range of climate-related information.
The SEC, the nation’s top financial regulator, proposed a rule in March that would require publicly-traded companies to tally up the greenhouse gas emissions produced from their operations and make that information publicly available. Bice’s bill, which was co-sponsored by Republican Reps. Dan Newhouse of Washington, Dusty Johnson of South Dakota and Buddy Carter of Georgia, will prevent the commission from forcing businesses to make climate-related disclosures that are “not material to investors,” which pertains to firms’ price-sensitive information that is given to shareholders.
“The SEC’s recently proposed rule would add nearly half a million dollars in compliance costs for publicly traded companies every year,” Bice said in a statement provided to the Daily Caller News Foundation. “Amidst stock market uncertainty, ongoing inflation, and supply chain shortages, the last thing we should do is add costs and make it harder for businesses to grow.”
Bice and 16 other Republican lawmakers wrote that the rule would impose “burdensome regulations on smaller companies” and called the SEC’s authority to enact such a rule into question in a December letter sent to SEC Chair Gary Gensler.
Under the SEC’s proposed rule, businesses would have to disclose “Scope 1” greenhouse gas emissions that are directly produced as well as “Scope 2” emissions that are indirectly created via purchased electricity. Moreover, companies would be forced to reveal any “Scope 3 emissions” that arise from their supply chains and other “indirect” activities.
“The SEC is tasked with overseeing financial markets and does not have the authority to require public companies to report Scope 3 emissions, climate risks or greenhouse gas emissions,” Bice stated.
BlackRock, the world’s largest asset manager that has cut back on investing in fossil fuels to meet international climate targets, stated that it is “generally supportive” of the Commission’s proposal to require disclosure of Scope 1 and Scope 2 emissions,” but disagrees “with the Commission’s approach to requiring disclosure of Scope 3 emissions,” according to public comments it submitted to the SEC.
The commission would also require companies to disclose how “severe weather events and other natural conditions” could affect their operations, as well as share their green energy transition plans as part of their “climate-related risk management strategy.”
Although the proposed rule previously drew strong criticism from multiple Republicans such as Senate Banking Committee Ranking Member Pat Toomey and SEC Commissioner Hester Peirce, the final rule is expected to be similar to the initial proposal, according to Bloomberg Law.
The SEC declined to comment.
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